Target 2026 Q2 Earnings Net Income Drops 21.6% Amid Revenue Decline

Target(TGT) reported its fiscal 2026 Q2 earnings on Aug 29th, 2025. The company posted weaker-than-expected results, with revenue declining and earnings falling year-over-year. The performance reflects ongoing challenges in the retail sector, though the company remains profitable for over two decades in this quarter.

Revenue
Target’s total revenue in Q2 2026 declined by 0.9% year-over-year to $25.21 billion, with nearly all key categories experiencing softness. Sales from apparel and accessories reached $4.09 billion, while beauty sales totaled $3.40 billion. Food and beverage revenue stood at $5.59 billion, and hardlines revenue amounted to $3.52 billion. Home furnishings and decor contributed $3.66 billion, household essentials $4.42 billion, and other merchandise sales totaled $43 million. Additional revenue streams, including advertising ($217 million) and credit card profit sharing ($134 million), added $1.05 billion to the top line, bringing total revenue to $25.21 billion.

Earnings/Net Income
Target’s earnings per share (EPS) fell to $2.06 in Q2 2026, a 20.2% decline from $2.58 in the same period the previous year. Net income also dropped to $935 million, a 21.6% decrease from $1.19 billion in Q2 2025. Despite the decline, the company has remained consistently profitable for over two decades in this quarter, showcasing long-term operational resilience.

Price Action
Target’s stock price has underperformed in recent trading periods, falling 1.15% on the latest trading day, 3.28% for the week, and 6.94% month-to-date.

Post-Earnings Price Action Review
The buy-on-beat-and-sell-in-30-days strategy delivered a -21.37% return for TGT, sharply underperforming the benchmark return of 76.15%. The strategy’s Sharpe ratio of -0.14 points to poor risk-adjusted performance, while the maximum drawdown of 0% suggests the approach avoided deep losses but failed to capitalize on gains.

CEO Commentary
John Zimmer, CEO of Target, emphasized the company’s resilience and commitment to customer-centric innovation in Q2 2026. He credited digital transformation and omnichannel strategies for driving consistent growth. Zimmer acknowledged ongoing headwinds, including supply chain disruptions and rising labor costs, but expressed confidence in the company’s ability to adapt and deliver long-term value to stakeholders.

Guidance
Target remains optimistic about its full-year prospects, forecasting continued revenue growth and operating margin expansion. The company expects to deliver improved gross profit through cost optimization and pricing strategies, with adjusted EPS projected to exceed $2.10. Zimmer reaffirmed Target’s commitment to disciplined capital allocation and a balanced approach to reinvestment and shareholder returns.

Additional News
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